The HOA board serves as the backbone of a community. Composed of elected or appointed members, the board is tasked with making critical decisions that directly impact residents’ property values and quality of life.
In this article, we explore the various roles and responsibilities of HOA board members. We also highlight the importance of serving on an HOA board and offer tips for managing leadership transitions.
Contents
- What is an HOA Board?
- Understanding an HOA Board’s Fiduciary Duty
- Specific Board Roles and Responsibilities
- A Closer Look: The HOA Board President’s Role
- How to Manage Improper HOA Leadership
- Why Serve on an HOA Board?
What is an HOA Board?
An HOA board is a group of elected or appointed residents who volunteer their time to ensure the community runs smoothly. More specifically, HOA boards are responsible for:
- Rule Enforcement: The board must enforce the covenants, conditions, and restrictions that govern the community.
- Financial Management: The board manages the HOA’s finances, distributing funds for maintenance, improvements, and other community needs.
- Maintenance of Common Areas: The board oversees the maintenance of common areas, such as parks and swimming pools.
- Communication: The board keeps homeowners informed about community issues, upcoming events, and any changes in rules or policies.
- Conflict Resolution: The board acts as a mediator in disputes between residents or between residents and the association.
- Community Planning: The board plans and implements community activities and events.
- Legal Compliance: The board ensures the HOA complies with local, state, and federal laws.
- Elections and Governance: The board organizes elections for new members and ensures governance procedures are followed.
Understanding an HOA Board’s Fiduciary Duty
Fiduciary duty refers to the legal and ethical obligation one party has to act in the best interest of another. In the context of an HOA, board members must prioritize the interests of the community and its members over their own personal interests.
Fiduciary duty typically encompasses three key responsibilities:
Duty of Care
The duty of care requires HOA board members to act with the same care and diligence that a reasonable person would exercise in similar circumstances. This means staying informed about community issues, financial matters, and any relevant laws or regulations. Board members should review documents, attend meetings, and engage in discussions.
Duty of Loyalty
The duty of loyalty obligates board members to put the interests of the HOA and its members above their own. This means avoiding conflicts of interest. For instance, if a board member has a financial stake in a landscaping company, they must disclose this relationship and recuse themselves from discussions or votes related to that company.
Duty to Act Within the Scope of Authority
The duty to act within the scope of authority means board members must operate in accordance with the powers granted to them by the HOA’s governing documents. This involves understanding the limits of their authority, including what decisions they can make with or without member approval.
Specific Board Roles and Responsibilities
Typically, an HOA board consists of a president, vice president, secretary, treasurer, and additional members at large.
President
The president is the leader of the HOA board and the face of the association. This individual is responsible for setting the agenda for meetings, presiding over discussions, and ensuring decisions are made in accordance with the governing documents and applicable laws. The president also serves as a liaison between the board and the community.
Vice President
The vice president supports the president and takes on the president’s duties in their absence. This role often includes assisting with meeting preparations and collaborating on community projects. The vice president may also take the lead on specific initiatives, such as community events or maintenance projects.
Secretary
Responsibilities of the secretary include taking detailed minutes during meetings, keeping records of board activities, and sharing documentation with members. The secretary also manages official correspondences, such as notifications of meetings and updates to homeowners.
Treasurer
The treasurer oversees the financial health of the HOA. This includes managing the association’s budget, tracking income and expenses, preparing financial reports for board meetings, and working with an accountant to file annual taxes.
Members at Large
Members at large serve as additional board members and take on various responsibilities depending on the community’s needs. For example, they may lead committees focused on specific concerns, such as landscaping, social events, or community safety.
A Closer Look: The HOA Board President’s Role
The HOA president is charged with a range of responsibilities, including:
Meeting Management
The president’s most formal role is meeting management. They run meetings, keep members on task, and make motions.
Communication
The president is the face of the HOA and serves as the sole point of contact for vendors, property managers, and other members of the community. He or she may also liaise with the Community Association Manager.
Marketing and Promotion
The board president is responsible for promoting the association within the neighborhood and fostering goodwill with residents. They are also responsible for nurturing positive relationships with stakeholders outside the neighborhood, such as city officials and real estate professionals.
Document Approval
For most HOAs, the president is the authority who signs documents. This includes any amendments, signatories on bank accounts, or contracts with third-party vendors.
Day-to-Day Operations
The president typically oversees the day-to-day operations of the HOA. This includes monitoring the performance of contractors, vendors, and any staff hired by the HOA.
Financial Oversight
The president collaborates with the treasurer to prepare the annual budget and ensure expenditures align with the community’s needs and priorities. The president may also handle matters related to HOA insurance and taxes.
Conflict Resolution
The president plays a crucial role in mediating conflicts among residents or between residents and the board. This may involve conducting informal discussions, facilitating formal hearings, or working with legal counsel.
Leadership and Teamwork
A board president creates a collaborative environment where every member feels valued. They encourage individuals with exceptional talents to run for the board and mentor future leaders within the community.
How to Manage Improper HOA Leadership
Board presidents should always act in the best interests of the community. However, it’s not uncommon for issues to arise when a president surpasses their authority or prioritizes personal interests over the community’s needs.
While this situation is never easy, the rest of the board has a fiduciary duty to the association and should never let the president’s power go unchecked.
If your HOA is struggling with an ineffective president, the steps below can help. It’s recommended that boards start with the most limited procedures and escalate to the most extreme.
Step 1: Direct Communication
The most straightforward approach is to talk to the president directly. A fellow board member can arrange a private meeting to discuss concerns about their leadership. Often, the president may not realize the impact of their actions and quickly adjust their behavior.
Step Two: Review Governing Documents
If direct communication fails, board members should consult the association’s governing documents and applicable laws. Understanding procedures for calling a vote to remove the president is essential.
Step Three: Vote to Remove the President
Board members can vote to remove the president, typically without advance notice. Once a president is removed from office, they often resign from the board entirely.
Step Four: Remove from the Board
If the former president continues to cause problems, it may be necessary to remove them from the board. Usually, this requires a vote of association members. The association’s governing documents should spell out procedures for calling and holding a recall election.
Step Five: Legal Action
As a last resort, board members or homeowners can pursue legal action to address a president who refuses to relinquish power. This involves seeking a court order to compel compliance, but it is a drastic step that can harm community relations.
Additional Measures
Other tactics to handle an overbearing board president include:
- Censure: Censuring a board president means formally reprimanding them for their actions. This process typically involves a vote by the board, resulting in a public statement that expresses disapproval. Censure serves as a warning, aiming to encourage the president to correct their behavior without removing them from office.
- Term Limits: Some associations establish term limits for board members. However, this tactic has drawbacks: Term limits can take too long to force the president off the board, they can cut short good board members, and they can deter qualified candidates from running for the board.
- Regular Association Elections: Through regular association elections, boards can recruit candidates with hopes of defeating existing leadership. Unfortunately, this solution can be time-consuming.
Why Serve on an HOA Board?
Taking an active role on your community’s HOA board allows you to influence decisions that directly affect your property. By serving, you ensure community standards are upheld and the needs of fellow residents are prioritized.
Here are some more reasons you should consider joining your community’s HOA:
Protect Your Property
A priority of all HOAs is to protect community property values. As a board member, you have the opportunity to make and implement rules that directly support this goal, such as establishing maintenance standards or creating landscaping guidelines.
Correct Problems
Have you noticed ongoing problems in your community, such as inadequate maintenance or covenant violations? If so, serving on the board could give you the chance to address existing issues while also implementing policies to avoid future ones.
Better Understand Applicable Laws
Volunteering as a board member allows you to deepen your understanding of state statutes, federal laws, and the HOA’s governing documents. This knowledge empowers you to make informed decisions on behalf of the community.
Develop New Skills
Many board members learn on the job, developing key skills like project management, financial literacy, and effective communication. Serving on an HOA board also teaches you soft skills such as collaboration, conflict resolution, and teamwork.
Give Back to the Community
By serving on an HOA board, you are contributing directly to your neighborhood. Your time and skills are helping address community issues, improve shared spaces, and make your community a better place.
Empower Your Board Members With Training and Education
Better-educated board members are more capable of making informed decisions and less likely to breach their fiduciary duties or lead the association astray. With this in mind, Community Association Management offers accessible, low-cost training programs for HOA boards.
Our courses cover crucial topics such as understanding financial statements, navigating new legislation, and effective communication. With in-person and online options available, we ensure that every board member has the knowledge and tools needed to serve their community.
To learn more about our training and education programs, contact us online or give us a call at 888-565-1226.
